De-mystifying the inconvenient truth: Does ex post moral hazard indeed exist in Korean private health insurance market?

Eun Hae Shin, Jae Young Lim

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

There have been heated debates on whether private health insurance creates moral hazard effects. Despite its importance, however, the moral hazard problem of private health insurance is still controversial and understudied. To empirically examine whether or not moral hazard exists in the Korean private health insurance market, we employed two-stage regression for endogeneity control and the Heckman two-step procedure for sample selection bias control, which are expected to produce consistent estimates. All estimation results do not allow us to detect the presence of the moral hazard effects and imply that people hold private health insurance simply as "safety net".

Original languageEnglish
Pages (from-to)129-147
Number of pages19
JournalHitotsubashi Journal of Economics
Volume51
Issue number2
Publication statusPublished - 2010 Dec

Keywords

  • Endogeneity
  • Moral hazard
  • Private health insurance
  • Sample selection bias

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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